In today’s briefing:
- JSR (4185 JP) – Launch of The Official Tender Offer (And the Double Arb)
- Quiddity Leaderboard S&P 500 Jun 24 Rebal: Many Intra-Review Changes Possible Due to M&A, Spin-Offs
- JSR Corporation (4185 JP): JIC Tender Starts and Should Succeed Despite Shin-Etsu’s Re-Rating
- Orecorp Should Now Back Perseus’ Offer
- Exploring Trading Setups Utilizing NPS’s ESG Fund Flows After July
- Tokio Marine Cross-Shareholding – At Least US$18bn of Cross-Shareholding to Sell
- Currys Lifts Profit Outlook After Suitors Walk Away
- Southern Cross Media (SXL AU): Re-Engages with ARN Media (A1N AU)/Anchorage on Revised Terms
JSR (4185 JP) – Launch of The Official Tender Offer (And the Double Arb)
- The Tender Offer is finally here. JIC announced the official launch after the close today.
- JIC appears to be taking on the SUNY RF risk as-is. The Tender Offer details vs the original expectations in the late June 2023 document are unchanged.
- Once started, unless a US court approves an injunction causing regulatory delay, this is done. But there are path events. And of course there is a double arb here.
Quiddity Leaderboard S&P 500 Jun 24 Rebal: Many Intra-Review Changes Possible Due to M&A, Spin-Offs
- The S&P 500 index tracks the 500 largest names listed in the US and it is one of the most highly-tracked indices in the world.
- The index is reviewed quarterly. The next review will be in June 2024 and the evaluation date for the rankings for the constituent selection process is 6th June 2024.
- In this insight, we take a look at the Potential ADDs and Potential DELs for the June 2024 index rebal event and the intra-review ADDs/DELETEs.
JSR Corporation (4185 JP): JIC Tender Starts and Should Succeed Despite Shin-Etsu’s Re-Rating
- JSR Corp (4185 JP) notes that the pre-condition for JIC’s tender has been satisfied. The offer price remains unchanged at JPY4,350 per share.
- The offer remains attractive despite the material re-rating of peers. The tender should succeed when combined with shareholder fatigue and a lack of vocal opposition.
- The tender requires a 66.7% minority acceptance rate. The gross and annualised spread for a 23 April payment is 0.6% and 7.1%, respectively.
Orecorp Should Now Back Perseus’ Offer
- Back in August, Silvercorp (SVM CN) bid A$0.15/share and 0.967 scrip for Orecorp (ORR AU); and secured board support after bumping the cash portion to A$0.19/share via an Off-market Offer.
- Perseus Mining (PRU AU) countered on the 22 January with a A$0.55/share Offer, which was rejected by Orecorp, ostensibly over concerns Perseus had not secured Tanzanian Fair Competition Commission approval.
- That regulatory approval has now been satisfied. The Offers for both Perseus and Silvercorp are conditional on 50.1% acceptance hurdles. I think Perseus’ all-cash Offer is superior.
Exploring Trading Setups Utilizing NPS’s ESG Fund Flows After July
- From July, Korea’s listed firms will disclose value enhancement plans. Korea’s NPS may exclude non-compliant firms, pending official response, though internal review suggests likely implementation.
- It’s crucial to know portfolio stocks for proactive positioning. A setup targeting potential exclusion from NPS’s ESG funds due to post-July compliance must be designed.
- Managers often use KRX ESG Leaders 150, aligning portfolios with it. Thus, it’s crucial to use this list for post-July compliance monitoring and to adapt setups for NPS’s flow impacts.
Tokio Marine Cross-Shareholding – At Least US$18bn of Cross-Shareholding to Sell
- The Japanese Financial Services Agency has asked the general insurers to reduce/eliminate their cross-shareholdings.
- Tokio Marine Holdings (8766 JP) had a stake over US$100m in at least 33 listed Japanese stocks, amounting to a total of US$16.5bn.
- In this note, we take a look at its stakes in various companies to see which ones could possibly be candidates for further selldowns.
Currys Lifts Profit Outlook After Suitors Walk Away
- Neither Elliot nor JD.com (9618 HK) intend to pursue Currys PLC (CURY LN) at this stage and thus won’t be able to present an offer for the next six months.
- Currys has issued an upbeat trading update. My new TP is 78p/share, >16% above Elliot’s sweetened offer, 10.4x 24e P/E vs 7.6x currently, and 9.1x 25e P/E vs 6.6x currently.
- My TP implied equity value is 864 million. I believe the Board and top shareholders would be willing to consider offers around 80p.
Southern Cross Media (SXL AU): Re-Engages with ARN Media (A1N AU)/Anchorage on Revised Terms
- Southern Cross Media (SXL AU) is re-engaging with ARN Media (A1N AU)/Anchorage at A$0.296 cash per share and 0.870 A1N shares per SXL share. Eligible shareholders get franking credits worth A$0.127.
- SXL’s re-engagement was driven by major shareholders, who are also supporting a motion to remove Mr Rob Murray as chairman due to the glacial pace of negotiation.
- While the offer is light compared to long-term adjusted exchange ratios and historical prices, large shareholders are supportive. Shares are trading through terms due to the large franking credits.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
